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STOPPING THE HIGH-TECH GIVEAWAY

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WHEN Reagan Administration opposition forced Fujitsu Ltd. to drop its plans to buy control of the Fairchild Semiconductor Corporation last week, Fujitsu and Fairchild executives immediately made it clear that their relationship was not dead. The two companies now plan to enter into a series of technology-exchange and development programs and joint manufacturing projects that will enable the companies to make and sell each other's products.

By teaming up with a foreign company in such a fashion, Fairchild is merly joining the pack. So-called cooperative ventures or strategic alliances with foreign companies have become a way of life in virtually every industry: Hundreds of American companies have turned to foreign partners for assistance in dealing with intensifying global competition, penetrating foreign markets and shouldering the heavy costs of developing sophisticated new products.

But even though there was no immediate outcry from Washington, Fujitsu's and Fairchild's plans to live together rather than marry still carry some of the same risks of transferring technology to Japan that had caused Government officials to oppose the proposed acquisition. Indeed, there are growing concerns in business, Government and academic circles that such American-foreign alliances have resulted in a largely one-way flow of technology and other critical skills from the United States to foreign nations, especially Japan. And while many American companies are loath to talk about it, a broad reassessment of alliances with foreign companies is clearly under way.

Many of the competitive problems now plaguing American manufacturers of such products as semiconductors, machine tools and consumer electronics stemmed from ties with foreign companies.

When the RCA Corporation licensed its color television technology to the Japanese decades ago, its leaders saw the deals as a low-risk way to make some easy money. RCA is still pocketing handsome royalties, but the Japanese now have a bigger share of the American market than the RCA brand.

More recently, cooperative ventures have come back to haunt the semiconductor industry. As recently as the early 1980's, American semiconductor makers were a symbol of America's technological might. But by entering into a range of licensing, marketing and manufacturing ties with American companies, the Japanese assimilated everything the masters had to teach. Now the Japanese are the masters, and the Americans are scrambling to catch up.

The big worry is that what happened in color televisions and electronics is happening everywhere. If American companies do not change their approach to cooperative ventures, the resulting transfer of technology to foreign countries, especially Japan, could ultimately threaten the nation's dominance of other key industries, including biotechnology, telecommunications, computers and aerospace, according to Government and business officials and experts who have studied the phenomenon.

''There is hardly an industry where we haven't transferred technology to Japan,'' said Clyde V. Prestowitz, who as counselor to the Secretary of Commerce was one of the nation's top trade negotiators with Japan from 1981 to mid-1986. ''If we give our technology away, we have nothing to compete with,'' he added.

Mr. Prestowitz may sound like he was stating the obvious, but it was something that a lot of managers were painfully slow to recognize.

Many American executives clung to the belief that the Japanese had no technology of worth long after that was no longer the case. Why? Tradition was one reason. Sheer arrogance was another.

After World War II, the United States Government encouraged American companies to share their technology to help rebuild the war-ravaged economies of Europe and Japan. Long after that task was accomplished, the technology outflow continued. Having dominated the world markets for so long, many American businessmen seemed incapable of seeing the Japanese as their equals let alone their superiors. Confident of their ability to stay at least one step ahead of the Japanese, they did not worry that they were helping the Japanese become formidable competitors.

Such talk can still be heard at aerospace companies such as Boeing and Pratt & Whitney, which enjoy a technological lead - at least for now. ''I don't see the Japanese or anyone else developing competitive technology by associating with us,'' said Robert Rosati, a recently-retired Pratt & Whitney official who led its joint venture with companies from Japan and three other nations to develop jet engines. ''They don't have the design or development capability to do any kind of engine, and they're not going to get them.''

But plenty of humbled executives in industries ranging from chemicals and cars to semiconductors and machine tools have wised up. ''Anytime you license a foreign company to manufacture and perhaps sell for you, you're in effect putting another competitor into the marketplace,'' said B. Charles Ames, chief executive of the Acme-Cleveland Corporation. ''Anybody who doesn't realize that is pretty damn naive.''

''Giving up technology is now far more suspect,'' said John M. Stewart, who advises major corporations on technology issues for McKinsey & Company, the consulting firm. ALARMED by the travails of the semiconductor industry, executives at the Ford Motor Company recently decided against entering into a venture with the Japanese to produce a high-technology component for the power train of its cars. And General Electric has become much more cautious about licensing its ''best high technology'' to the Japanese, said Philip V. Gerdine, a G.E. executive. General Electric's ''wariness'' of the Japanese ''has gone up as our respect for them has gone up,'' he said.

The Intel Corporation, the semiconductor maker, licensed a half-dozen domestic and foreign manufacturers, including Fujitsu and NEC, to make its first microprocessor for the International Business Machines Corporation's personal computer and compatible machines. For its new third-generation microprocessor, it will license no more than two companies and maybe none. Acme-Cleveland once licensed Mitsubishi Heavy Industries to manufacture and sell one of its machine tools only to watch Mitsubishi become its rival in the United States market. Acme-Cleveland incorrectly assumed Mitsubishi's ambitions were limited to Asia. Now, in choosing a Japanese company to make some of its telecommunications equipment, Acme-Cleveland is being ''darn careful to make sure the company that is going to manufacture it for us does not have any apparent interest in getting into this market,'' said Mr. Ames. And Acme-Cleveland, he said, will make sure that its licensing agreements include market restrictions.

Companies that had relied on joint ventures to compete in Japan are now establishing wholly owned subsidiaries. Duracell, Kraft Inc.'s battery subsidiary, did that last November, when it canceled a venture with Sanyo Electric. E.I. du Pont de Nemours & Company is operating new businesses in Japan on its own and is shifting some activities of its existing Japanese ventures to a subsidiary, according to William H. Davidson, an associate professor at the University of Southern California's Graduate School of Business. Carl De Martino, a Du Pont group vice president, said: ''Given our free choice, we would prefer to have a 100-percent-owned company anywhere.''

American companies, when they do contribute technology to a venture, are demanding technology of equal value in return, something many had not done as recently as five years ago.

''There's a greater sensitivity to the need to get a two-way exchange as opposed to the one-way flow, which was fundamentally the way most joint ventures in the last 20 years were structured,'' said S. Allen Heininger, a vice president of Monsanto and president-elect of the Industrial Research Institute, an organization of senior research officials from major companies.

Under the terms of a new joint venture in semiconductors with the Toshiba Corporation, for example, Motorola Inc. will give Toshiba some of its microprocessor technology but will receive Toshiba's ''very leading edge'' technology in memory chips and manufacturing, said Keith J. Bane, Motorola's director of strategy.

To insure that the technology flows both ways, a growing number of American companies are insisting that their managers be involved in ventures in Japan. Celanese (which was bought by Hoechst of West Germany earlier this year) trained two of its employees to speak Japanese and put them into a joint venture with Daicel Chemical Industries to soak up Daicel's expertise in automotive plastics. They are now back in Detroit working to apply what they learned.

While many joint ventures in Japan have been confined to manufacturing and marketing, more American companies are insisting that they do research and development. Only 8 percent of the new ventures formed in Japan in 1973 involved research and development, but 35 percent of those formed in 1985 did, according to a study by Laurent L. Jacque, an assistant professor at the University of Pennsylvania's Wharton School.

At the very least, some American companies are using ventures as a way to master Japanese management techniques. That was a key motive for General Motors's joint venture with Toyota to make small cars in California. UNLIKE American managers, foreign businessmen, especially the Japanese, long ago realized that they could exploit these alliances for more than just quick gains in market share or short-term profits. For them, ventures were a way to gain the technology and skills needed to achieve global leadership.

In his studies of such ventures, including five of Du Pont's in plastics, Professor Davidson found a pattern. The Japanese company would assimilate its American partner's technology or production skill and then squeeze out the American partner.

Such a squeeze led to the split-up last summer of a venture between Humphrey Instruments, a California concern, and Hoya Glass of Japan. ''Hoya developed the ability to produce the machines on its own and effectively terminated the agreement,'' Professor Davidson said.

One reason that the Japanese often seem to end up with the upper hand is that they frequently wield total management control of the venture. Several of the Du Pont ventures that Professor Davidson studied had no American managers.

An even more basic problem, according to several experts, is that many more Japanese speak English than Americans speak Japanese.

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This has made it difficult for Monsanto, the chemicals concern, to make sure it was getting as valuable technology from its Japanese partners as it is giving to them.

''We have few scientists who are proficient in Japanese,'' Mr. Heininger said. As a result, ''we don't have the fluency to probe in detail their technical people the way they can probe in detail our technical people.''

The Japanese have not been nearly as generous about sharing their technology and manufacturing expertise, contends Robert B. Reich, professor of political economy and management at Harvard University's Kennedy School of Government. In his study of 100 ventures, he found that Japanese companies almost always tried to keep the highest value-added parts of production for themselves.

If this trend continues, he worries that the Japanese will increasingly be the ones who turn American breakthroughs in basic science into useful products. Americans, he said, will become second-class assemblers and distributors of Japanese goods.

In many cases, though, American companies have had little choice but to form disadvantageous relationships to do business in Japan.

Until the mid-1970's, the Japanese prohibited Americans from setting up wholly owned subsidiaries in Japan. Instead, they had to enter into jointly owned enterprises with Japanese companies. And the price of entry into Japan included a requirement to license their technology to Japanese concerns.

Even after these laws were relaxed, American companies frequently found it difficult to break into the Japanese market on their own. This has been especially true in such expensive, technologically sophisticated products as telecommunications equipment and commercial aircraft, where the Japanese Government - like the governments of most countries - plays a big role in determining which vendor wins an order. As is still the case in most countries, including Japan, sharing technology and production with local companies is a prerequisite for winning an order.

Cultural differences have also made it virtually impossible for American companies to compete on their own in Japan.

The long-term relationships between suppliers, manufacturers and distributors so valued in Japan hinder American companies. With acquisitions frowned upon in Japan, American companies have often had little choice but to team up with a Japanese company to break into the market. DESPITE all the dangers, strategic alliances with foreign companies, including the Japanese, seem here to stay. Indeed, even with the reassessment of ventures going on, no one expects any significant slowdown in their formation.

American inventiveness is admired throughout the world, but small companies, which account for so many discoveries, must often turn to foreign partners for help in making and distributing their products - and for the capital needed to stay alive.

Even giants, though, will continue to link up with foreign companies. General Motors, Ford and Chrysler now import not only components but entire cars from Asia. Companies in businesses ranging from appliances to photocopiers to machine tools have resorted to the same tactic. Such arrangements often force the American company to disclose vital design or product information.

Business leaders have also come to view strategic alliances as a necessity in industries where product development costs are exorbitant.

It costs $50 million to $100 million to bring a new drug to market, so pharmaceutical companies have to market it rapidly throughout the world to recoup the investment. That requires strategic alliances, said Henry Wendt, president and chief executive of the SmithKline Beckman Corporation, which has joint development and marketing agreements with Boehringer Mannheim of West Germany, Fujisawa of Japan and Wellcome P.L.C. of Britain.

Similarly, virtually no single company can afford the billions of dollars it costs to develop a new commercial jet - not to mention the $500 million to $700 million to develop the engines to power it. For that reason, international consortiums have become a way of life in the aerospace industry.

In a recent interview, Makoto Kuroda, a senior official of the Japanese Ministry of International Trade and Industry, reiterated his Government's assertion that Japan has abandoned all ambitions to become an independent power in commercial jets. At least publicly, such aerospace companies as Boeing and Pratt & Whitney, the jet engine maker, say the Japanese lack the design and systems ability and the innovativeness to threaten American leadership in aircraft or engines. But privately, industry officials are nervous, said Leslie Denend, a McKinsey consultant.

Boeing will allow its Japanese partners to design and produce components equal to 25 percent of the value of the 7J7, the 150-seat, fuel-efficent jet that Boeing plans to have in service in the early 1990's. That is about twice the share that the Japanese produced of the 200-seat 767.

Even if the Japanese pose no immediate threat to prime contractors such as Boeing, they are already taking business away from American component suppliers, said David C. Mowery, an aerospace expert at Carnegie-Mellon University. Eventually, they may do the same to the prime contractors, according to many experts. SLOWLY, painfully, American managers are learning that doing business in a global economy carries enormous dangers along with opportunities. Having been burned by foreign alliances, some managers, at least, have lost the arrogance that made them such easy prey. The question is whether managers in other industries will learn from their example, or have to learn on their own. The GovernmentTries to Help

Government officials are attempting to limit the dangers posed by the proliferating ties between American and foreign companies by enacting new laws and relaxing old ones.

Until a new law was enacted last year, pharmaceutical companies could not sell products for clinical testing or sale abroad unless the Food and Drug Administration had approved them for testing or sale in the United States. That forced such biotechnology companies as Genentech to license their technology to foreign companies instead of supplying their products abroad themselves. ''We now have less need to transfer technology,'' said Thomas D. Kiley, Genentech's vice president for corporate development.

Once it was virtually impossible for American semiconductor companies to protect their mask designs - the ''negatives'' from which semiconductors are made - from foreign pirates. But new laws have substantially strengthened copyright protection of masks and microcoding, instructions implanted in semiconductors. Combined with the designation of a special Federal court to hear patent-infringement cases, that has had a dramatic effect: 70 to 80 percent of such suits are now upheld, up from 20 to 30 percent before.

A 1984 law enabled semiconductor makers to engage in joint research. A group of electronics companies then formed a reseach consortium, the Microelectronic and Computer Technology Corporation. A Pentagon advisory group is supporting the formation of a semiconductor consortium to develop manufacturing technology and engage in limited production of chips.

To keep the aerospace industry competitive, the President's Office of Science and Technology Policy recommended in February that American companies be allowed to collaborate not only on research for super-fast aircraft but also on development - something antitrust laws now bar.

''There is no hysteria now'' about the aerospace industry's competitiveness, said Crawford F. Brubaker, Deputy Assistant Secretary of Commerce. ''But given what has happened in other industries, we don't want it to happen in this one.''

The Varieties of Business Alliances Joint Venturesinvolve the creation of an enterprise jointly owned by the parent companies to develop or manufacture or sell particular products often in a particular market. In many American-Japanese joint ventures, the Americans contributed the technology, only to find themselves discarded when their Japanese partner had mastered the innovation. Licensing Agreementstypically permit the licensee to manufacture and sell a product incorporating the owner's technology in return for royalty payments. But in electrical power plant equipment, color television sets, machine tools, electronic components and many other industries, agreements have not limited licensees to a given market or product application. By improving on the technology itself, capitalizing on their lower manufacturing costs or applying the technology to new products, Japanese companies have used the license to become strong competitors in the United States and abroad. Marketing/Manufacturing/Supply Arrangements enable a partner to make or sell and service the other's products. American companies have used these arrangements to import low-cost foreign components or entire products, and to distribute American-made products in foreign markets. Because such alliances often involve sharing American technology and design specifications with the foreign partner, the result has often been one-way technology transfer.

A version of this article appears in print on March 22, 1987, on Page 3003001 of the National edition with the headline: STOPPING THE HIGH-TECH GIVEAWAY. Order Reprints|Today's Paper|Subscribe